FCA Consultation on illiquid assets and open-ended funds
The FCA is consulting on proposals to reduce the potential for harm to retail investors in funds that hold illiquid assets, particularly under stressed market conditions, and help address financial stability concerns.
They are proposing a package of measures that will require:
- mandatory suspension when the independent valuer expresses uncertainty about the value of 'immovables' above a certain threshold;
- contingency plans to be established in case of a liquidity risks crystallising;
- more information to be disclosed to investors about the liquidity risks in such funds and how these risks are managed.
For full details including links to the research which the FCA have undertaken so far, view the FCA website by clicking here.
AREF will be preparing a response to the consultation due on 25 January 2019 and will engage further with members during the process